Paving the Way with Innovation:
An Interview with Terry Boston, CEO, PJM Interconnection
PJM Interconnection President and CEO Terry Boston joined KEMA at the 2010 Utility of the Future leadership forum as a featured CEO panelist and speaker. While at the forum, Mr. Boston sat down with me to talk about PJM’s innovation initiatives that are paving the way for a smart, reliable and sustainable energy future.
PJM is the second largest grid operator in the world, serving more than 51 million people in 13 states and the District of Columbia. More than $15 billion has been approved for investment in system upgrades over the last decade to maintain reliability within the Regional Transmission Organization (RTO). PJM also is actively engaged in exploring and piloting aspects of tomorrow’s grid including energy storage, plug-in hybrid electric vehicles, and demand response.
Q: Terry, thank you for taking this time with me to share insights into PJM’s innovations. Obviously there’s a lot of change in the utility and energy industry. We’re seeing technology enabling a fundamental shift in how the grid is managed, how it’s operated, new demands on the grid, and the promise of connecting with end-user customers in new ways. Could you give me an overview of your perspective on this time of change?
Boston: We are seeing more change in the industry today than I have seen for quite some time. For example, we have a more than $30 billion smart grid experiment underway, which is a sea change shift in the utility paradigm.
One aspect of this paradigm shift is competition. I truly believe in competition. I think the only sustainable competitive advantage most of us have is our ability to learn faster than the competitors. And, we’ll all need to understand how we can help empower the consumer to be part of the competitive marketplace. At the heart of it this empowerment, as we’ve been seeing in smart grid initiatives in California and Maryland, is an alignment of smart, educated customers and smart, real-time pricing, brought together and enabled through automated metering and advanced metering infrastructure.
In the old world, the RTO pretty much focused down to the substation. Today we need a way to get prices and information across to the end-use consumer. We've got to have integration of the wholesale and retail price alignment to leverage price elasticity to gain customer participation. If we miss the boat there, the price elasticity I'm talking about will not have great value in the marketplace. And, I'm a fan of prices-to-devices, but you've got to keep it simple and automated to go forth.
Q: Smart grid—smart metering, AMI, power electronics and the various emerging system and in-home technologies—is a catalyst for sea change. How do you define “smart grid?”
Boston: On the smart grid I keep it simple. I define smart grid as two-way communication and control. If you don’t have two-way communication and control it's probably of no value to us in the control center. If you don’t have smart pricing to go with it, it's of less value.
In terms of making smart wholesale-retail price alignment, we already have the technology—we have known how to do it for a long time. The federal stimulus funds are going to put us up to speed much faster; there was $800 million out of $4.3 billion of DOE Smart Grid Investment Grants within the PJM footprint. But again, if we don’t do this with rigor, and I worry a little that the protocol standards are coming too slow compared to the fact that we have to order the meters and put the devices in. So we will have some retrofit as we go forward in this area.
Q: You mention stimulus funding. What’s the status of PJM’s stimulus-funded project to install more than 80 additional high-tech monitoring units—phasor measurement units (PMUs), or synchophasers, among the 12 PJM transmission owners?
Boston: We’re collaborating with Midwest ISO to jointly implement smart synchrophaser technology—also known as PMUs—to improve power system reliability and efficiency across the Midwest and Eastern United States. Ultimately sychrophaser technology will help us improve our grid visibility. This advanced grid-monitoring technology enhances reliability by increasing the ability of grid operators to collect and analyze data on system conditions over a wide area at a much higher frequency. This means our operators will have access to more precise data, more quickly—what I like to call a “high definition” view of the grid. This hi-def view helps improve reliability, reduce transmission congestion, and helps integrate intermittent renewable resources, such as wind and solar.
Together PJM and Midwest ISO received a $30 million grid grant to help install more than 240 synchrophasers. We’re sharing technical information to identify potential locations throughout our regions to install PMUs. Target areas of collaboration include Testing Phasor Data Concentrator software, developing data-exchange prototypes, and defining common technical infrastructure. We’ll also share information on interoperability of PMU equipment.
The technology is really quite amazing. With synchrophasors, voltage and current at a given location can be measured more than 30 times per second. When compared with traditional SCADA technology that takes measurements every four seconds, you get a good idea of “high definition” aspect of the PMU technology.
This year we’re looking at over 10 devices being place in the PJM footprint, and 14 in Midwest ISO over the course of three years. Currently a total of 14 PMUs are installed across the PJM region. Starting this fall and through the next three years, 12 PJM transmission owners will install PMUs in more than 80 substations in 10 states, along with the 17 phasor data concentrators to collect the PMU data covering about 75 percent of PJM’s total load.
Given the value of PMUs in enhancing reliability, PJM is also cooperating with NERC as part of the North American SynchroPhasor Initiative (NASPI) to act as a data concentrator hub. This hub will be responsible for collecting PMU data from PJM’s footprint for wide-area visibility. NASPI has more than 100 connected PMUs feeding data into a "Super Phasor Data Concentrator" system based at the Tennessee Valley Authority.
Q: You also mentioned concern about the pace of standards development. What role is PJM playing in the on-going effort toward creating standards for smart grid deployment, what is your perspective on the progress being made on this front?
Boston: To implement a Smart Grid, we need a technology strategy that relies on an open-systems architecture—an architecture that links the grid together from consumer communications devices, through to the retailer and to the grid operator and the generator. From a technology standpoint, the open systems architecture strives for platform-independent, plug-and-play solutions. This will allow different applications, systems, devices and services to communicate with each other using a common set of protocols and procedures. It also will enable the reuse of service components to reduce development costs and implementation time.
One way PJM is involved in building the common standards platform, of providing a guide-path forward, is the development of our Advanced Control Center, what we call our AC2 program. We partnered with Siemens to develop a shared architecture platform to integrate systems like energy management and market management.
At its foundation, AC2 is being built on an open systems architecture. We set two goals for our AC2 program: upgrade PJM’s main Control Center with state-of-the-art technology and systems; and build a parallel Control Center with the same technology.
The facilities will operate in parallel and either will be capable of controlling the entire RTO grid and wholesale electricity markets. Both facilities will use new technology to improve reliability, security and efficiency through the development of advanced applications for generation control, intelligent event processing and improved visualization of system conditions. These new approaches are considered to be groundbreaking and could change the way the grid is observed, managed and operated.
AC2 is taking a “building block” approach to enable the interoperability of software applications from multiple vendors, the integration of advanced technologies and a reduction in support and maintenance costs. With its open systems architecture, the enterprise service bus being developed in AC2 showcases the kind of technology backbone needed to enable a Smart Grid network. The open and modular framework being implemented in the AC2 project really positions PJM at the leading edge of plug-and-play technology and the smart grid evolution.
Q: Another area I know you’ve been very engaged in is energy storage. What is the status of energy storage initiatives taking place within the PJM region?
Boston: Energy storage is one of the most important advances in the industry. If we look at the nation and what we're going to do on the carbon front, wind is by far the lowest-cost renewable we can put in. PJM alone has 42,000 megawatts of wind in our interconnection planning queue—about 3,000 is connected; 3,000 is under construction; and 36,000 under study. This means big changes in terms of how the system is going to integrate and work together. All of those are going to be distant from our load centers. Our wind currently is along the Allegheny Mountains and in Illinois in the flat Midwest states.
Offshore wind has become a very big item in the mid-Atlantic states. Fifty-three percent of the population in this country lives within 100 miles of the coast and has 17 percent of the land mass. There's one land owner, the Department of Interior. The cost, we don’t know. There's 54,000 megawatts offshore potential off the PJM region there going from New Jersey down to North Carolina.
So we have to solve the problem of low-cost, affordable storage. Storage is necessary to enable use of fast-arriving renewable energy resources. Only storage can integrate these resources to make them operationally viable. It’s a way to save the energy they produce when the wind isn’t blowing or the sun isn’t shining. And if you like plug-in electric vehicles, you also have to love storage and transmission.
Something I’m personally very interested in is hot water heaters or thermal storage. I've actually experimented with water heater controls and it worked quite well. Seventy percent of all water is heated at night and why? You need the load for the nuclear. If you've got that much nuclear you need the off-peak load. To make the storage mechanism work, you just have to buy the controls. You don’t have to buy all the other things. You have to work out an arrangement with the homeowner. The real electric cooperatives are much stronger at this than many of the urban systems because they don’t have the gas competition. But there's about 25 gigawatts of that load connected that we could tap in to help us regulate the system and store energy.
Q: One final question. You mentioned PHEVs. This is another area in which PJM has been actively engaged. With upward of a million EVs projected to be on the road in the United States within the next decade, what do RTOs / ISOs need to accomplish to prepare for integrating the emerging EV market and associated recharging loads?
Boston: More batteries. I love plug-in hybrid vehicles. I think they are the answer for North America for three reasons. They're good for national security. They're more economic. There is nothing more efficient when you think about it, than an electric motor. I'll commit to 60 cents per gallon off peak electricity if you'll let me optimize the charge rate on the PJM system. And thirdly, they’re good for the automobile in this country as we try to retool and rebuild the manufacturing capacity we have in the country.
PJM is interested in advancing the electrification of the transportation system, particularly in the role of plug-in hybrid electric vehicles, PHEVs. We are part of a consortium that is evaluating and demonstrating how PHEVs can be integrated into and benefit the electric grid. We’re interested in understanding the efficiency and regulation benefits.
The electrification of the transportation system would use off-peak electricity from the grid to charge PHEVs. This would enhance the efficiency of the grid by shifting electricity use to the off-peak, nighttime hours. The vehicles also could provide regulation service to the grid during the daytime hours. This vehicle-to-grid (V2G) technology concept would allow PHEVs to charge from the grid at night, and to discharge the power stored in their batteries to the grid during the day based on regulation signals from PJM. With large numbers of such vehicles plugged in, they could serve as a “battery on the grid.”
We’re working with the Mid-Atlantic Grid Interactive Car Consortium (MAGICC) to demonstrate and evaluate V2G technology. The MAGICC vehicle began participating actively in providing regulation service to PJM and receiving payments in return in December 2009, marking a first for V2G technology in PJM. There are five of these cars now.
We also co-sponsored two PHEV summit meetings in the East and Midwest that brought together representatives of the electric industry, automakers, academia and government to discuss how PHEVs could be integrated into the grid, their role as storage devices to help expand the use of intermittent resources like wind energy, and their role in the smart grid.
So what do system operators need to do to be prepared for integrating PHEVs? First, this is a real opportunity for the power industry to work with the regulatory community, so we can be ready when PHEVs come into the world. We need collaboration and information sharing between automakers and utilities. And, we need to bring our consumers on board and help educate customers. They don’t like things that are complicated. We already have the technology; we’re doing the system studies; we can integrate PHEVs. It’s a matter of making the technology work and making it easy for consumers.
To learn more about PJM’s initiatives that are piloting tomorrow’s grid, visit http://www.pjm.org/about-pjm/exploring-tomorrows-grid.aspx